PurposeIn the rapidly changing market and environment, companies need to employ highly competitive human resources for sustaining a competitive advantage. Human resource management (HRM) practices have a significant impact on firm performance. The purpose of this paper is to identify the key HRM factors from a survey of 41 Indo‐Japanese and 35 Indian firms operating in Delhi and the National Capital Region (NCR) (India) in the automobile sector that affect the productivity and overall performance of firms.Design/methodology/approachThis study is largely based on secondary data combined with an analysis of primary data. It includes primary data collection and the usage of quantitative research tools. A comparative analysis of the Indian and Indo‐Japanese firms operating in Delhi and the NCR has also been made. Factor analysis has been undertaken to examine the various HRM factors that affect the productivity of a firm.FindingsA factor analysis of nine items revealed four underlying dimensions in the instrument. In the case of Indo‐Japanese firms, the factors concerned are: talent planning and engagement; talent motivation; in‐service training; and assessment of training needs. For Indian firms, the factors concerned are: talent acquisition and engagement; talent motivation and need assessment; talent planning; and talent training.Research limitations/implicationsA hybrid model has been developed that combines the relatively important HR variables on the basis of the results of the survey of Indo‐Japanese and Indian firms.Originality/valueHitherto, no study has been undertaken to compare the HRM factors of Indian and Indo‐Japanese firms and to subsequently develop a hybrid model. This model blends the features of both types of firms.

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